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Prairie Swine Centre is an affiliate of the University of Saskatchewan
Prairie Swine Centre is grateful for the assistance of the George Morris Centre in developing the economics portion of Pork Insight.
Financial support for the Enterprise Model Project and Pork Insight has been provided by:
Feed, Caloric and Financial Efficiency
Posted in: Economics, Energy, Pork Insight Articles by admin on March 14, 2013 | No Comments
Providing sufficient dietary energy is the most expensive cost for a swine facility, and high barn throughput is now not always the way to gain the most net profit. Energy comes from starch, protein, fat, and fibre which are all used with a different efficiency. Current diets often use a wide variety of ingredients, and the price relationship between ingredients has changed, making the cost of formulating present diets more complex than in the past. Once obtained by the pig, energy can be used for maintenance, fat gain, or lean gain. Maintenance uses 25-35% of the energy intake: this will need to be accounted for if pigs are kept in the barn for a longer period of time. The trade-off for using a less expensive, lower energy diet is that the pig will be in the facility for longer, and maintenance and space costs will be higher than for a quicker throughput. When lowering dietary energy concentration it is important to consider the energy intake of the pig. At too low a concentration, the pig may not be able to consume enough feed to maintain the same growth rate as a higher concentration feed. The intake of feed varies among farms, and it would be best to create a farm-specific feed intake curve to determine what energy concentration will be best. Other aspects of the diet will have an impact on carcass characteristics as well, for example dietary fat. The source and the quantity of fat in the diet will affect the deposition and firmness of the carcass fat. Overall, dietary energy concentrations and sources should be carefully considered to lower costs, but the other aspects of the diet should not be overlooked.
Developing strategies for water conservation in swine production operations
Posted in: Economics, Energy, Environment, Pork Insight Articles by admin on June 5, 2012 | No Comments
The abstract for a study on water usage by drinkers and cleaning purposes. Three types of drinkers were tested for water use: controlled nipple, nipple with side plate, and trough with a constant level. Effectiveness and water use were recorded for cleaning with sprinkling beforehand and nozzle type in two differently floored rooms. Reducing water use in commercial barns can save money, but also has an environmental impact.
Evaluation of heating systems in swine grow-finish rooms
Posted in: Economics, Energy, Pork Insight Articles by admin on | No Comments
The abstract for a study comparing three heating systems in a grow-finish room for electricity and natural gas use, pig performance, and air quality. The systems tested were a heat recovery ventilator (HVA), a ground source heat pump (GSHP), and a conventional forced-air convection heater. The HVA and GSHP provided an overall energy saving of 52% and 39% respectively, and had no impact on animal performance, even though feed intake was lower. The study was conducted for three winter months, and additional trials will need to be performed.
Canadian “Risk Management” Approaches: ASRA, ASRA-lite, and HPIP
Posted in: Economics, Pork Insight Articles by admin on June 4, 2012 | No Comments
Four of the government programs in Canada to help the pork industry are the federal AgriStable program, Assurance Stabilisation des Revenus Agricoles (ASRA), Risk Management Program (RMP), and the Alberta Hog Price Insurance Program (HPIP). The AgriStability program provides payment when producers fall below 85% of their previous margin (income-expenses) for the last 3-5 years. The payment is 60-80% of the loss, depending on the margin. For ASRA, a stabilized income is the cost of production plus a return. Payments are made if the average selling price is less than the stabilized income, and are reduced by 40% if the producer is not part of AgriStability. RMP requires premiums paid in advance and enrollment in AgriStability, and producers receive the higher support from AgriStability or RMP, but not both. RMP is tied to AgriStability, and the benefit of RMP is only seen if the RMP payment would be greater than the provincial portion of AgriStability. However, RMP should potentially pay out in sync with market drops, which does not necessarily happen with AgriStability. HPIP locks in a market price in return for the payment of a premium, and pays if the market price drops below that point. In evaluation of the programs ASRA provides good assistance, but the program is overdrawn; and AgriStability smooths out fluctuations, but doesn’t help with long-term declines in the market. RMP does not appear to benefit producers enough to justify paying the premium; although, it may benefit producers with low AgriStability margins. HPIP has not been received well because of the premium required, no current payouts, and lack of government funding.
Risk Management: A Producer’s Perspective
Posted in: Economics, Pork Insight Articles by admin on | No Comments
Risk is the probability of a negative outcome occurring, and in businesses usually the negative outcome is a loss of profit. For the pork industry, sources of risk can be production, market, public policy, human resource, or legal. Some of the ways to respond to risk can fall into the categories risk avoidance, understanding and measuring it, increasing capacity to bear risk, reduction, and transfer. The return on equity depends on the return on assets, leverage, and cost (of debt). Revenue and cost risks depend on global pork or supplies (feed mainly) prices, exchange rates, and production issues like sow productivity or grow-finish performance. Having a risk management strategy and alternate opportunities can help with risk, but two unavoidable risks are feed prices and hog industry itself.
Enteric Diseases – Common Infectious Causes: What Are The Economic Costs?
Posted in: Economics, Pork Insight Articles by admin on May 30, 2012 | No Comments
Entreric diseases such as swine dysentery, proliferation enteropathy, epidemic diarrheoa, salmonellosis, and colibacillosi can commonly affect pork facilities, and have an economic impact. There are different ways to consider the economic cost of one of the diseases. Costs can be determined by the lost market opportunity, the cost of raising the pig until death, the lost breeding opportunity, feed conversion, additional costs due to reduced weight gain, increased variation in standard matrix weight contract, increased back-fat depth, or additional costs including feed additives and veterinary care. In the case of swine dysentery the economic cost is high, the feed conversion rises by 0.58, feed and facility costs increase 15% per kg, and medication can cost $2.5 per pig. Proliferative enteropathy decreases average daily gain 37-42%, which increases feed required per kg by 27-37%. The costs could be $6-7 per affected grower pig, but would depend on the facility and market weight agreements.
Prediction of Future Prices and Cost of Production
Posted in: Economics, Pork Insight Articles by admin on May 12, 2012 | No Comments
After the summer of 2011 growth expectations were reset to lower. There is expected to be slow growth in the US, Canada, and Europe due to high crude oil prices, and the US recession. Asia is expected to have an increase of 6.1% for GDP, with China leading with 9% expected GDP growth. Crop prices have been rising, and a series of poor crop yields has increased the demand without increasing the supply. Crop supplies are expected to increase 6%, especially from sources outside the US. Feed grain supply is expected to catch up with demand, and likely decrease feed costs. As for pork, China and Korea are expected to increase production, which will lower import demand for these countries. Overall export rates are expected to stay nearly where they are, only modest expansion is expected for North America.
Marketing Options in a New Environment
Posted in: Economics, Pork Insight Articles by admin on March 28, 2012 | No Comments
The Ontario Pork marketing environment has changed due to changes in regulation and changes in the market environment itself. Changes in regulation have made enrollment in Ontario Pork’s marketing services voluntary, and credit protection is only available to pigs sold through Ontario Pork. The market has changed to favour farmer’s bargaining, and to create more market options. For example, there are now grids that will accept a variety of sub-par finishing weights, and the trend of speciality products is expected to continue to rise. The Ontario processing industry also has increased investment and capacity. The new market has increased risks with receiving payment, created a hog deficit which favours farmers, and resulted in more variable plant grids. As well, a new pricing methodology was created by Ontario Pork Universal Services. The Ontario Pork Marketing Service is voluntary, but offers benefits like credit protection, plant contracts, benchmarking and evaluation services, and the Forward Pricing Program.
Why Benchmarking is Important
Posted in: Economics, Pork Insight Articles, Production by admin on | No Comments
Benchmarking allows for meaning comparisons to be made between companies or regions, and areas capable of improvement to be identified. When opportunities for improvement are identified, the entire team should be aware of the new goals, clear measurements should be tracked, long term growth should be considered, and knowledge can be shared with the benchmarking group. To succeed, benchmarking need significant commitment, accurate measurements of variables, and continuous data recording.
Implementing Simple and Useful Production Benchmarking
Posted in: Economics, Pork Insight Articles, Production by admin on | No Comments
Benchmarking allows for comparison within an industry to provide insight in how to improve. Paradigm blindness is when business leaders become focused on their own operation and fail to consider outside factors. When benchmarking, it is important that all of the values being compared have been calculated in the same manner. As well, performance data can be useful, but the real benefit of benchmarking usually comes from comparing financial results. One way to ensure the variables compared are the same, and to compare current performance and financial information, is to use a benchmarking company such as Agri Stats.